중남미

One of the main roles of a central bank is the conduct of the monetary policy. Modernly, the key monetary policy instrument is the policy rate (Selic rate, in the case of Brazil), which is a reference for all the other interest rates in the economy, as the banking lending interest rates. The economic theory predicts the central bank is free to choose the level of the policy rate only temporarily. In the long run, the policy rate should converge to its equilibrium level, which is not directly affected by central bank measures, being determined by structural features of the economy. The main challenge is that this equilibrium rate, known as the natural interest rate, is not observed and its mathematical expression can be different according to the theoretical model analyzed.